ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read this discussion and analysis of our financial condition and consolidated results of operations together with the consolidated financial statements, related notes and other financial information included in this Annual Report on Form 10-K, or this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including statements of our plans, objectives, expectations and intentions, contain forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Please also see the section titled “Forward-Looking Statements.”
For the discussion of the financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” and “Liquidity and Capital Resources” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission, or the SEC, on February 25, 2025.
Overview
We are a clinical-stage pharmaceutical company developing a novel class of medicines, which we refer to as Bicycle® molecules, for diseases that are underserved by existing therapeutics. Bicycle molecules are fully synthetic short peptides constrained to form two loops which stabilize their structural geometry. This constraint facilitates target binding with high affinity and selectivity, making Bicycle molecules attractive candidates for drug development. Bicycle molecules are a unique therapeutic modality combining the pharmacology usually associated with a biologic with the manufacturing and pharmacokinetic, or PK, properties of a small molecule. The relatively large surface area presented by Bicycle molecules allows targets to be drugged that have historically been intractable to non-biological approaches. Bicycle molecules are excreted by the kidney rather than the liver and have shown no significant signs of immunogenicity to date, qualities which we believe explain the molecules’ favorable toxicological profile.
We have a novel and proprietary phage display screening platform which we use to identify Bicycle molecules in an efficient manner. The platform initially displays linear peptides on the surface of engineered bacteriophages, or phages, before “on-phage” cyclization with a range of small molecule scaffolds which can confer differentiated physicochemical and structural properties. Our platform encodes quintillions of potential Bicycle molecules which can be screened to identify molecules for optimization to potential product candidates. We have used this powerful screening technology to identify our current portfolio of candidates in oncology and intend to use it in conjunction with our collaborators to seek to develop additional future candidates across a range of other disease areas.
Our internal programs are focused on oncology indications with high unmet medical need. Our product candidate, nuzefatide pevedotin, formerly BT5528, is a Bicycle Drug Conjugate, or a BDC®molecule, whereby the Bicycle molecules are chemically attached to a toxin that, when administered, is cleaved from the Bicycle molecule and kills the tumor cells. We are evaluating nuzefatide pevedotin, a BDC molecule targeting Ephrin type A receptor 2, or EphA2, in both an ongoing company-sponsored Phase I/II clinical trial to assess safety, pharmacokinetics and clinical activity in patients with advanced solid tumors and an ongoing company-sponsored Phase II clinical trial to evaluate the efficacy, safety and pharmacokinetics of nuzefatide pevedotin in adult patients with recurrent metastatic pancreatic ductal adenocarcinoma after progression on a first-line therapy, which commenced recruiting patients in the first quarter of 2026. We are also developing BT1702, a Bicycle Radioconjugate, or BRC®, molecule targeting Membrane Type 1 matrix metalloproteinase, or MT1-MMP, and carrying a lead-212, or 212Pb, radioisotope payload for theranostic use. We are currently conducting Investigational New Drug application, or IND, -enabling activities for BT1702. We are also developing Bicycle Imaging Agents, or BIA molecules. In a BIA molecule a Bicycle molecule is linked to a chelated radiopharmaceutical imaging agent. We are using BIA molecules to potentially derisk novel targets prior to further clinical development and to efficiently triage cancer indications for subsequent treatment with both BRC and BDC molecules. Our discovery pipeline in oncology includes next-generation BDC molecules, BRCmolecules and BIA molecules.
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Zelenectide pevedotin, a BDC molecule targeting Nectin-4, is being evaluated in an ongoing company-sponsored Phase I/II clinical trial to assess the safety, pharmacokinetics and clinical activity in patients with Nectin-4 expressing advanced malignancies, an ongoing Phase II/III registrational trial called Duravelo-2 evaluating zelenectide pevedotin in patients with untreated and previously treated metastatic urothelial cancer and in ongoing company-sponsored Phase I/II clinical trials to assess the efficacy and safety of zelenectide pevedotin in patients with NECTIN4 amplified advanced breast cancer and NECTIN4 amplified advanced or metastatic non-small cell lung cancer, which commenced recruiting patients in the first and third quarters of 2025, respectively. In March 2026, we announced the strategic reprioritization of our clinical portfolio to focus on our promising pipeline of next-generation therapeutics, including nuzefatide pevedotin as well as next-generation Bicycle conjugates, including BRC molecules. While dose selection data from the clinical trial for zelenectide pevedotin are promising, demonstrating response rates comparable to published rates for existing standards of care and a differentiated safety profile, we plan to convert the Phase II/III Duravelo-2 registrational trial to a randomized Phase II clinical trial and deprioritize the program for internal development while we evaluate next steps for zelenectide pevedotin following preliminary feedback from regulatory agencies. In addition, as part of the strategic reprioritization, we plan to discontinue the Phase I/II clinical trials evaluating zelenectide pevedotin in patients with NECTIN4 amplified advanced breast cancer and NECTIN4 amplified advanced or metastatic non-small cell lung cancer. Further enrollment in these trials will be closed and patients already enrolled will complete their course of treatment.
Our other product candidate, BT7480, is a Bicycle Tumor-Targeted Immune Cell Agonist®, or Bicycle TICA®molecule. A Bicycle TICA molecule links immune cell receptor binding Bicycle molecules to tumor antigen binding Bicycle molecules. BT7480, a Bicycle TICA molecule targeting Nectin-4 and agonizing CD137, is being evaluated in a company-sponsored Phase I/II clinical trial. After reporting certain data from the clinical trial in the first half of 2026, we will no longer develop BT7480 internally and intend to explore partnership opportunities for future development.
Beyond our wholly owned oncology portfolio, we are collaborating with biopharmaceutical companies and organizations in additional therapeutic areas in which we believe our proprietary Bicycle screening platform can identify therapies to treat diseases with significant unmet medical need.
Workforce Reductions
In August 2025, we announced cost reduction initiatives to reduce planned operating costs, primarily through a workforce reduction that was substantially complete as of December 31, 2025. As a result, we incurred aggregate charges for severance and other employee termination benefits of $5.3 million during the year ended December 31, 2025. In addition, in March 2026, we announced the strategic reprioritization of our clinical portfolio to focus on our promising pipeline of next-generation therapeutics, including nuzefatide pevedotin as well as next-generation Bicycle conjugates, including BRC molecules. In connection with the strategic reprioritization, we are implementing a proposed workforce reduction of approximately 30% of our workforce. Together, the workforce reduction and strategic reprioritization are expected to reduce our annual operating expenses by approximately 50% based on our current plans. We expect the workforce reduction to be substantially completed by the end of 2026, and that we will incur aggregate charges, representing cash expenditure for severance and other employee termination benefits, of approximately $8.0 million.
Financial Overview
Since our inception, we have devoted substantially all of our resources to developing our Bicycle platform and our product candidates, conducting research and development of our product candidates and preclinical programs, raising capital and providing general and administrative support for our operations. To date, we have financed our operations primarily with proceeds from the sale of our equity securities; proceeds received from upfront payments, research and development payments, and development milestone payments from our collaboration agreements; and borrowings pursuant to a loan and security agreement, or the Loan Agreement, with Hercules Capital, Inc., or Hercules. From our inception in 2009 through December 31, 2025, we have received gross proceeds of $1.4 billion from the sale of equity securities and $239.6 million of cash payments under our collaboration agreements, including $46.3 million
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from Bayer Consumer Care AG, or Bayer, $53.0 million from Novartis Pharma AG, or Novartis, $49.7 million from Ionis Pharmaceuticals, Inc., or Ionis, and $56.0 million from Genentech Inc., or Genentech. We do not have any products approved for sale and have not generated any revenue from product sales.
Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $219.0 million, $169.0 million and $180.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, we had an accumulated deficit of $899.8 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
We expect that our expenses and capital requirements will decrease in the near term as a result of our cost saving initiatives and our strategic reprioritization announced in March 2026. However, our expenses and capital requirements may increase substantially if and as we:
● develop, maintain, expand and protect our intellectual property portfolio;
● acquire or in-license other products and technologies;
We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take many years and is subject to significant uncertainty. We have no commercial-scale manufacturing facilities of our own, and all of our manufacturing activities have been and are planned to be contracted out to third parties. Additionally, we currently utilize third-party contract research organizations, or CROs, to carry out our clinical development activities. If we seek to obtain marketing approval for any of our product candidates from which we obtain encouraging results in clinical development, we expect to incur significant commercialization expenses as we prepare for product sales, marketing, manufacturing, and distribution.
As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, charitable
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and governmental grants, monetization transactions or licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of one or more of our product candidates. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
As of December 31, 2025, we had cash and cash equivalents of $628.1 million. We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of filing of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. See “Liquidity and Capital Resources” and “Capital Resources and Funding Requirements.”
Components of Our Results of Operations
Collaboration Revenue
To date, we have not generated any revenue from product sales and we do not expect to generate any revenue from product sales for the foreseeable future. Our revenue primarily consists of collaboration revenue under our arrangements with our collaboration partners, including amounts that are recognized related to upfront payments, milestone payments and option exercise payments, amounts due to us for research and development services and reimbursement of certain expenses incurred. In the future, revenue may include additional milestone payments and option exercise payments, and royalties on any net product sales under our collaborations. In the near term, we expect that revenue may decrease as a result of the terminations of our collaboration agreements with Genentech and Novartis, effective in August 2025 and February 2026, respectively. In the future, we expect that any revenue we generate will fluctuate from period to period as a result of the timing and amount of license, research and development services, milestone and other payments, as well as the exercise or expiration of options.
Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research and development activities, including our discovery efforts, and the development of our product candidates, which include:
● the cost of consultants;
● costs related to compliance with regulatory requirements; and
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Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid expenses and other current assets or accrued research and development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
Our direct external research and development expenses are tracked on a program-by-program basis and consist of costs, such as fees paid to consultants, contract research organizations, or CROs, contractors and CMOs in connection with our preclinical and clinical development activities. Costs incurred after a product candidate has been designated and that are directly related to the product candidate are included in direct research and development expenses for that program. Costs incurred prior to designating a product candidate are included in discovery, platform and other expense. We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.
In December 2016, we entered into a Clinical Trial and License Agreement with Cancer Research Technology Limited, or CRTL and Cancer Research UK, or the BT1718 Cancer Research UK Agreement, pursuant to which the Cancer Research UK Centre for Drug Development sponsored and funded a Phase I/IIa clinical trial for our previous product candidate, BT1718, in patients with advanced solid tumors. The costs incurred by Cancer Research UK were recorded as a liability in accordance with ASC 730, Research and Development as the payments were not based solely on the results of the research and development having future economic benefit. The accrual of the liability was recorded as incremental research and development expense in our consolidated statements of operations and comprehensive loss prior to the expiration and termination of the BT1718 Cancer Research UK Agreement in December 2024. See “Other Income (Expense)” for additional information on our accounting for the expiration and termination of the BT1718 Cancer Research UK Agreement.
Through our subsidiaries in the U.K., we receive reimbursements of certain research and development expenditures as part of a U.K. government research and development tax relief program. For 2023 and 2024, we benefitted from the Small and Medium-sized Enterprises, or SME, R&D Tax Relief program, under which we were able to surrender trading losses that arose from qualifying research and development expenses incurred by our subsidiaries in the U.K. for a cash rebate. The Finance Act 2024, which was enacted in February 2024, replaced the legacy research and development expenditure credit and the SME R&D Tax Relief program with a merged research and development expenditure credit scheme, or RDEC, and an enhanced research and development intensive support scheme, or ERIS. The Finance Act 2024 increased the cash rebate that may be claimed from 18.6% to 26.97% of qualifying expenditure and retroactively applied to qualifying expenditures incurred after April 1, 2023, if we qualify as “R&D intensive” for an accounting period (broadly, a loss-making SME whose relevant R&D expenditure represents, for accounting periods beginning on or after April 1, 2023, 40%, or, for accounting periods beginning on or after April 1, 2024, 30% of its total expenditure for that accounting period). For periods prior to April 1, 2023 the cash rebate was up to 33.35% of qualifying expenditures. We qualified as R&D intensive for the years ended December 31, 2025, 2024 and 2023. Going forward, if we no longer qualify as an R&D intensive SME during an accounting period, we will be subject to a single 20% gross rebate rate applying to all claims under the RDEC scheme.
For 2025 and beyond, the Finance Act 2024 also introduces restrictions (unless limited exceptions apply) on the tax relief that can be claimed for expenditures incurred on sub-contracted R&D activities or externally provided workers, where such sub-contracted activities are not carried out in the U.K. or such workers are not subject to U.K. payroll taxes. These restrictions may limit our ability to claim R&D tax credits for sub-contracted R&D in the future.
The U.K. research and development tax credit is fully refundable to us after surrendering tax losses and is not dependent on current or future taxable income. As a result, we have recorded the entire benefit from the U.K. research and development tax credit as a reduction to research and development expenses and it is not reflected as part of the income tax provision.
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Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will decrease in the near term as a result of our cost saving initiatives and our strategic reprioritization announced in March 2026. However, our research and development expenses will increase over the longer term if and as we: (i) continue the clinical development and seek to obtain marketing approval for our product candidates; (ii) initiate clinical trials for our product candidates; and (iii) build our in-house process development and analytical capabilities and continue to discover and develop additional product candidates.
The successful development of our product candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the remainder of the development of these product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from our product candidates. This is due to the numerous risks and uncertainties associated with developing products, including the uncertainty of:
● completing research and preclinical development of our product candidates;
● continued acceptable safety profile of the drugs following approval; and
● attracting, hiring and retaining qualified personnel.
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For
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example, the FDA, the European Medicines Agency, or EMA, or another regulatory authority may require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or we may experience significant trial delays due to patient enrollment or other reasons in which case we would be required to expend significant additional financial resources and time on the completion of clinical development. In addition, we may obtain unexpected results from our clinical trials and we may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. In addition, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the current EU pharmaceutical legislation. The proposed revisions remain to be agreed and adopted by the European Council. Moreover, on December 1, 2024, a new European Commission took office. The proposal could, therefore, still be subject to revisions. If adopted in the form proposed, the European Commission proposals may result in a decrease in data and market exclusivity opportunities for our product candidates in the EU and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including share-based compensation, for personnel in our executive, finance, corporate and business development, commercial and administrative functions. General and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services, insurance, travel expenses and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
Foreign currency transactions in currencies different from the applicable functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange differences resulting from the settlement of such transactions and from the remeasurement at period-end exchange rates in foreign currencies are recorded in general and administrative expense in the consolidated statements of operations and comprehensive loss. As such, our operating expenses may be impacted by future changes in exchange rates. See “Quantitative and Qualitative Disclosures About Market Risks” for further discussion.
We expect that our general and administrative expenses will decrease in the near term as a result of our cost saving initiatives and our strategic reprioritization announced in March 2026. However, we expect that our general and administrative expenses may increase in the future if and as we increase our general and administrative headcount to support our continued research and development and potential commercialization of our portfolio of product candidates. We also expect to continue to incur increased expenses associated with being a public company including costs of accounting, audit, information systems, legal, intellectual property, regulatory and tax compliance services, director and officer insurance and investor and public relations.
Other Income (Expense)
Interest and Other Income
Interest and other income consists primarily of interest earned on our cash held in operating accounts and our cash equivalents.
Interest Expense
Interest expense consists primarily of interest expense for financing arrangements.
Loss on Extinguishment of Debt
Loss on extinguishment of debt is related to the loss recognized from the repayment and voluntary termination of the Loan Agreement on July 9, 2024.
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Gain on Extinguishment of Research and Development Funding Liability
Gain on extinguishment of research and development funding liability is related to the gain recognized from the extinguishment of the research and development funding liability previously recognized under the BT1718 Cancer Research UK Agreement. In December 2024, we entered into an Expiry and Revenue Sharing Agreement, or the BT1718 Expiration Agreement, with CRTL and Cancer Research UK pursuant to which, among other things, the BT1718 Cancer Research UK Agreement, and all rights and obligations (other than certain surviving provisions as outlined in the agreement) under the BT1718 Cancer Research UK Agreement, expired and terminated. As such, we recognized a gain on extinguishment of the research and development funding liability of $4.5 million during the year ended December 31, 2024, which is recorded within other income, net, in the consolidated statements of operations and comprehensive loss.
Provision For (Benefit From) Income Taxes
We are subject to corporate taxation in the United States and the U.K. We have generated losses since inception and have therefore not paid U.K. corporation tax. The provision for (benefit from) income taxes included in the consolidated statements of operations and comprehensive loss represents the tax impact from operating activities in the United States, which has generated taxable income based on intercompany service arrangements.
After consideration of our history of cumulative net losses in the U.K., we have concluded that it is more likely than not that we will not realize the benefits of our U.K. deferred tax assets and accordingly we have provided a valuation allowance for the full amount of the net deferred tax assets in the U.K. We intend to continue to maintain a full valuation allowance on our U.K. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The release of the valuation allowance would result in the recognition of certain deferred tax assets and an incremental benefit from income taxes in the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.
Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of U.K. taxable profits.
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Results of Operations
The following table summarizes our results of operations for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
(in thousands)
Operating expenses:
Other income (expense):
Loss on extinguishment of debt — (954) —
Provision for (benefit from) income taxes 152 (4,765) 1,457
Comparison of the Years Ended December 31, 2025 and 2024
Year Ended
December 31,
(in thousands)
Operating expenses:
Other income (expense):
Loss on extinguishment of debt — (954) 954
Provision for (benefit from) income taxes 152 (4,765) 4,917
Collaboration Revenue
Collaboration revenue increased by $37.3 million in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to increases of $38.8 million from our collaboration with Novartis primarily due to the recognition of all remaining revenue upon a notice of termination from Novartis in November 2025, effective in February 2026, as well as $5.5 million from our collaboration with Bayer primarily due to the recognition of revenue
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upon a notice of termination from Bayer of one of the target programs in November 2025, effective in January 2026. These increases were offset by a decrease in revenue of $6.9 million from our collaboration with Ionis due to the completion of the combined licenses and research and discovery performance obligation during the year ended December 31, 2024.
Research and Development Expenses
The following table summarizes our research and development expenses for the years presented:
Year Ended December 31,
(in thousands)
Bicycle tumor-targeted immune cell agonists 1,991 7,840 (5,849)
Research and development expenses increased by $67.3 million in the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to increases of: $44.1 million in clinical program expenses for zelenectide pevedotin primarily due to the Phase II/III Duravelo-2 registrational trial as well as the Phase I/II clinical trials assessing zelenectide pevedotin in patients with NECTIN4 amplified advanced breast cancer and NECTIN4 amplified advanced or metastatic non-small cell lung cancer, which commenced recruiting patients in the first and third quarters of 2025, respectively; $12.9 million in discovery, platform and other expense primarily due to continued development of our pipeline programs, including advancing our Bicycle radioligand molecule pipeline; $11.0 million in employee and contractor related expenses primarily attributable to higher headcount prior to our August 2025 workforce reduction as well as $2.2 million in incremental severance-related costs period over period; and $8.3 million resulting from a decrease in research and development incentives primarily due to the retroactive impact of U.K. R&D tax credit reimbursement rate changes that were enacted and effective in the first quarter of 2024, retroactively applied to April 1, 2023. These increases were offset by decreases of: $5.8 million in Bicycle TICA program development expenses due to the timing of clinical program activities; $1.4 million in share-based compensation expense primarily due to the impact of our workforce reduction in August 2025; and $1.1 million in facility expenses.
We begin to separately track program expenses at candidate nomination, at which point we accumulate all direct external program costs incurred to support that program to date. Through December 31, 2025, we have incurred approximately $283.4 million and $57.2 million of direct external expenses for the development of zelenectide pevedotin and nuzefatide pevedotin, respectively, since their candidate nominations, and an aggregate of $51.3 million of direct external expenses for the development of the two named BicycleTICA candidates since their nominations.
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General and Administrative Expenses
The following table summarizes our general and administrative expenses for the years presented:
Year Ended December 31,
(in thousands)
Other general and administration costs 9,577 9,047 530
Effect of foreign exchange rates (653) 719 (1,372)
Total general and administrative expenses $ 79,368 $ 72,181 $ 7,187
General and administrative expenses increased by $7.2 million in the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases of $4.9 million in personnel-related costs primarily associated with higher headcount prior to our August 2025 workforce reduction as well as $1.6 million in incremental severance-related costs period over period, and $2.8 million in share-based compensation primarily associated with equity grants issued since the prior year, offset by a favorable impact of $1.4 million due to the effect of foreign exchange rates.
Other Income, net
Other income, net decreased by $7.8 million in the year ended December 31, 2025 compared to the year ended December 31, 2024, which was primarily due to a decrease in interest and other income of $5.8 million related to lower average interest rates period over period as well as higher cash and cash equivalents balances in the second half of 2024. In addition, during the year ended December 31, 2024, we recorded a gain on extinguishment of the research and development funding liability of $4.5 million recognized in the fourth quarter of 2024 as a result of the termination of our arrangement with Cancer Research UK for BT1718. These impacts were offset by a decrease in interest expense of $1.5 million due to the repayment and voluntary termination of the Loan Agreement in July 2024 and the loss on extinguishment of debt of $1.0 million recognized in the third quarter of 2024.
Provision For (Benefit From) Income Taxes
The provision for income taxes of $0.2 million for the year ended December 31, 2025, is primarily the result of the reversal of deferred tax assets for share-based payments resulting from our August 2025 workforce reduction. The benefit from income taxes of $4.8 million for the year ended December 31, 2024, is mainly the result of deferred tax assets benefited in the United States that do not have a valuation allowance against them because of profits that will be generated by an intercompany service agreement, including income tax benefits of approximately $3.5 million recognized during the third quarter of 2024 related to the completion of a U.S. research and development tax credit study.
Liquidity and Capital Resources
Liquidity
From our inception in 2009 through December 31, 2025, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We do not expect to generate significant revenue from sales of any products for several years, if at all.
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To date, we have financed our operations primarily with proceeds from the sale of our equity securities, proceeds received from upfront payments, payments for research and development services and development milestone payments pursuant to our collaboration agreements, and borrowings pursuant to our Loan Agreement with Hercules.
Cash Flows
The following table summarizes our cash flows for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
(in thousands)
Net cash used in investing activities (2,350) (1,235) (2,929)
Net cash (used in) provided by financing activities (131) 519,750 250,027
Effect of exchange rate changes on cash 804 (694) 1,346
Operating Activities
Net cash used in operating activities for the year ended December 31, 2025 was $249.7 million as compared to $164.7 million for the year ended December 31, 2024. The increase in cash used in operations of $85.0 million is primarily due to an increase in cash payments for clinical program activities, primarily related to the multiple clinical trials for zelenectide pevedotin, including for the Phase II/III registrational trial in patients with untreated and previously treated metastatic urothelial cancer and the initiation of the Phase I/II clinical trials in patients with NECTIN4 amplified advanced breast cancer and NECTIN4 amplified advanced or metastatic non-small cell lung cancer.
Investing Activities
During the years ended December 31, 2025 and 2024, we used $2.4 million and $1.2 million, respectively, of cash in investing activities for purchases of property and equipment, consisting primarily of laboratory equipment.
Financing Activities
During the year ended December 31, 2025, net cash used in financing activities was $0.1 million, primarily consisting of payments of finance lease obligations.
During the year ended December 31, 2024, net cash provided by financing activities was $519.8 million, primarily consisting of net proceeds of $544.1 million from the private placement completed in May 2024 and $7.5 million from the exercise of share options, offset by payments on debt of $31.9 million associated with the repayment and voluntary termination of the Loan Agreement.
At-the-Market Program
On June 5, 2020, we entered into a Controlled Equity OfferingSM Sales Agreement, or the Sales Agreement, with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc., collectively, the Sales Agents, with respect to an at-the-market, or ATM, program pursuant to which we may offer and sell through the Sales Agents, from time to time at our sole discretion, ADSs. Our prospectus supplement dated May 26, 2023, related to our ADSs issuable pursuant to the Sales Agreement is not currently effective. Accordingly, we will not make any sales of our securities pursuant to the Sales Agreement unless and until a new prospectus, prospectus supplement or a new registration statement is filed. No ADSs were issued or sold pursuant to the Sales Agreement during the year ended December 31, 2025.
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Loan Agreement
On July 9, 2024, we repaid all amounts outstanding, including $30.0 million in outstanding borrowings, $0.1 million in accrued and unpaid interest, an end-of-term charge of $1.5 million and a prepayment charge of $0.3 million, for a total aggregate payment of $31.9 million, and terminated the Loan Agreement. Upon the termination of the Loan Agreement, all security interests granted to the secured parties thereunder were terminated and released. For additional information on the Loan Agreement, see Note 6. “Debt” of our consolidated financial statements included elsewhere in this Annual Report.
Capital Resources and Funding Requirements
Our material cash requirements include expenses associated with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates and as we:
● develop, maintain, expand and protect our intellectual property portfolio;
● acquire or in-license other products and technologies;
If we obtain marketing approval for any product candidate that we identify and develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution to the extent that such sales, marketing, and distribution are not the responsibility of our collaboration partners.
In addition, the following table summarizes our contractual obligations as of December 31, 2025 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods. For additional information, see Note 11. “Commitments and contingencies” of our consolidated financial statements.
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Payments due by period
Less than More than
Total 1 year 1 to 3 years 3 years to 5 years 5 years
(in thousands)
In the ordinary course of business, we enter into various agreements with contract research organizations to provide clinical trial services, with contract manufacturing organizations to provide clinical trial materials, and with vendors for preclinical research studies, synthetic chemistry and other services for operating purposes. These payments are not included in the table above since the contracts are generally cancelable with advanced written notice, generally with a notice period of 90 days or less. From the time of notice until termination, we are contractually obligated to make certain minimum payments to the vendors, based on the timing of the notification and the exact terms of the agreement.
We have also entered into separate agreements with third parties which provide for various future milestone payments upon the achievement of specified development, regulatory, commercial and sales-based milestones with an aggregate total value of $105.8 million, as well as potential future royalty and other payments at percentages ranging from very low to low single digits. These additional milestone payments are contingent upon future events that are not considered probable of achievement as of December 31, 2025. As of December 31, 2025, we were unable to estimate the timing or likelihood of achieving these milestones.
As of December 31, 2025, we had cash and cash equivalents of $628.1 million. We expect that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of filing of this Annual Report.
We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of product candidates and programs, and because the extent to which we may enter into collaborations with third parties for development of our product candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including:
● the costs, timing and outcome of regulatory review of our product candidates;
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● the success of our ongoing or future collaborations;
● the costs of operating as a public company.
Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, monetization transactions, government contracts or other strategic transactions. To the extent that we raise additional capital through the sale of equity, ownership interests of existing holders of our ADSs and ordinary shares will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our ADSs or ordinary shares. If we raise additional funds through collaboration agreements, strategic alliances, licensing arrangements, monetization transactions, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt or equity financing that we raise may contain terms that are not favorable to us or our shareholders.
Global trade disruption, volatility in the capital markets and continued uncertainty may contribute to a general global economic slowdown or recession. Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. In addition, current or future tariffs or other trade barriers may result in increased research and development expenses, including with respect to increased costs associated with active pharmaceutical ingredients, raw materials, laboratory equipment and research materials and components. High interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Furthermore, such economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, in the future increased inflation rates and macroeconomic turmoil may adversely affect us by increasing our costs and the costs of our CMOs and other suppliers. In addition, our labor and research and development costs may increase due to supply chain constraints, consequences associated with geopolitical conflicts, war, worsening global macroeconomic conditions, including those resulting from changes in global trade policies, or other factors, which may result in additional stress on our working capital resources. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.
Critical Accounting Estimates
Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the
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reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in greater detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Collaboration Revenue
Our revenues are generated primarily through collaborative arrangements and license agreements with pharmaceutical companies. The terms of these arrangements may include (i) performing research and development services using our bicyclic peptide screening platform with the goal of identifying and/or optimizing compounds for further development and commercialization, (ii) the transfer of intellectual property rights (licenses), or (iii) options to obtain additional research and development services or licenses for additional targets, or to optimize product candidates, upon the payment of option fees.
The terms of these arrangements typically include payment to us of one or more of the following: non-refundable upfront license fees; payments for research and development services and reimbursement of certain expenses incurred; fees upon the exercise of options to obtain additional services or licenses; payments based upon the achievement of defined collaboration objectives; future regulatory and sales-based milestone payments; and royalties on net sales of future products.
We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, or ASC 606. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, and financial instruments.
Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy the performance obligations. We only apply the five-step model to contracts when it is probable that we will collect substantially all of the consideration we are entitled to in exchange for the goods or services we transfer to the customer.
As part of the accounting for these arrangements, we must make significant judgments, including identifying performance obligations in the contract, including assessing whether options to additional goods or services provide a material right to the customer, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each performance obligation based on estimated relative standalone selling prices, and measuring progress towards the satisfaction of each performance obligation.
Many of our performance obligations, whether distinct or combined, do not have readily available standalone selling prices and therefore we are required to make judgments and estimates regarding the standalone selling prices utilizing key assumptions, which may include other comparable transactions, pricing considered in negotiating the transaction, probabilities of technical and regulatory success and estimated costs. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of an arrangement. In addition, we must determine whether a change in scope or price of a contract represents a contract modification and, if so, account for the effects of the modification when it is approved by both parties to the contract. We determine the accounting for a contract modification as (i) a separate contract if the
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modification adds distinct goods or services and the price of the contract increases by an amount that reflects the standalone selling price of those additional goods or services; (ii) a termination of the existing contract and creation of a new contract if the remaining goods or services are distinct from those transferred before the modification; (iii) a cumulative catch-up adjustment to the revenue recognized on the original contract if the remaining goods or services are not distinct from those transferred before the modification; or (iv) a combination of (ii) and (iii) if the remaining goods or services include both goods and services that are distinct from those transferred before the modification and goods and services that are not distinct.
Licenses of Intellectual Property: If a license to our intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, we recognize revenue from the portion of the transaction price that is allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a license to our intellectual property is distinct from the other promises in the arrangement, we consider factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own and whether the required expertise is readily available. In addition, we consider whether the collaboration partner can benefit from a license for its intended purpose without the receipt of the remaining promises, whether the value of the license is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. For licenses that are combined with other promises, such as research and development services and a research license, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.
Customer Options: A customer’s right to choose, at its discretion, to make a payment for additional goods or services is generally considered an option. If we are not presently obligated to provide, and do not have a right to consideration for delivering additional goods or services, the item is considered an option. We evaluate customer options to obtain additional items (i.e., additional license rights) for material rights, or options to acquire additional goods or services for free or at a discount. Optional future goods and services that reflect their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations and are accounted for as separate contracts. If optional future goods and services reflect a significant or incremental discount, they are material rights, and are accounted for as performance obligations. We allocate the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires.
Milestone Payments: Our collaboration agreements may include development and regulatory milestones. We evaluate whether the milestones are considered probable of being reached and estimate the amounts to be included in the transaction price using the most likely amount method. We evaluate factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the licensee’s control, such as marketing approvals, are not considered probable of being achieved until those approvals are received. At the end of each reporting period, we re-evaluate the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenue and net loss in the period of adjustment. Milestone payments that may only be achieved after the exercise of a customer option are excluded from the initial determination of the transaction price.
Royalties: For sales-based royalties, including milestone payments based on the level of sales, we determine whether the sole or predominant item to which the royalties relate is a license. When the license is the sole or predominant item to which the sales-based royalty relates, we recognize revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, we have not recognized any sales-based royalty revenue resulting from our collaboration agreements.
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Accrued External Research and Development Expenses
As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued external research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advanced payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued external research and development expenses include costs associated with:
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs, research institutions and vendors that supply, conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and actual results could differ from our estimates. Our historical accrual estimates have not been materially different from actual costs, and as of December 31, 2025, there have not been any material adjustments to our prior estimates of accrued external research and development expenses.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Sensitivity
As of December 31, 2025, we had cash and cash equivalents of $628.1 million. Our exposure to interest rate sensitivity is impacted by changes in the underlying U.K. and U.S. bank interest and treasury rates. Our surplus cash has been invested in money market funds that invest primarily in short-term, highly liquid securities and that maintain a stable net asset value. We have not entered into investments for trading or speculative purposes. Due to the conservative nature of our investment portfolio, which is predicated on capital preservation of investments with short-term maturities, we do not believe an immediate one percentage point change in interest rates would have a material effect on the fair market value of our portfolio. Our earnings would be affected by changes in interest rates due to the impact those changes have on interest income generated from our cash and cash equivalents. We believe we have minimal interest rate risk as a one percentage point change in the average interest rate on our portfolio would not have a material effect on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2025.
Foreign Currency Exchange Risk
The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. The functional currency of Bicycle Therapeutics plc and Bicycle Therapeutics Inc. is the United States Dollar, or USD. The functional currency of Bicycle Therapeutics plc’s wholly owned non-U.S. subsidiaries, BicycleTx
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Limited and BicycleRD Limited, is the British Pound Sterling, and the consolidated financial statements are presented in USD. The functional currency of our subsidiaries is the same as the local currency.
Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in general and administrative expense in the consolidated statements of operations and comprehensive loss as incurred. We recorded a foreign exchange gain of $0.7 million for the year ended December 31, 2025 and foreign exchange losses of $0.7 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively.
For financial reporting purposes, our consolidated financial statements have been translated into U.S. dollars. We translate the assets and liabilities of BicycleTx Limited and BicycleRD Limited into USD at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during the period and shareholders’ equity amounts are translated based on historical exchange rates as of the date of each transaction. Translation adjustments are not included in determining net loss but are included in our foreign currency translation adjustment included in the consolidated statements of shareholders’ equity and as a component of accumulated other comprehensive income (loss) in the consolidated balance sheets.
We do not currently engage in currency hedging activities in order to reduce our currency exposure, but we may begin to do so in the future.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required by this item are set forth beginning on page F-1 of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures.
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
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Management’s Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Our internal control over financial reporting is a process designed under the supervision of our principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
Our management conducted an assessment of our internal control over financial reporting based on the framework established in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on the assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
Attestation Report of the Registered Public Accounting Firm
We are a non-accelerated filer and a smaller reporting company, and therefore our independent registered public accounting firm has not issued an attestation report on the effectiveness of internal control over financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 9B. OTHER INFORMATION.
Insider Trading Arrangements
During the three months ended December 31, 2025, our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of our securities set forth in the table below, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”).
Type of Trading Arrangement
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information About Our Directors and Executive Officers
The information required by this item will be contained in our Proxy Statement under the captions “Board of Directors and Corporate Governance—Board of Directors” and “Executive Officers of the Company” and is incorporated herein by reference.
Identification of Audit Committee and Financial Experts
Information regarding our Audit Committee required by this item will be contained in our Proxy Statement under the caption “Board of Directors and Corporate Governance—Corporate Governance—Committees of our Board of Directors—Audit Committee,” and is hereby incorporated by reference.
Material Changes to Procedures for Recommending Directors
Information regarding procedures for recommending directors required by this item will be contained in our Proxy Statement under the caption “Board of Directors and Corporate Governance—Corporate Governance—Committees of our Board of Directors—Nominating and Corporate Governance Committee—Shareholder Recommendations and Nominees,” and is hereby incorporated by reference.
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Code of Business Conduct and Ethics
Information regarding our Code of Business Conduct and Ethics required by this item will be contained in our Proxy Statement under the caption “Board of Directors and Corporate Governance—Corporate Governance—Code of Business Conduct and Ethics,” and is hereby incorporated by reference. The full text of our Code of Business Conduct and Ethics is available at the investors section of our website at www.bicycletherapeutics.com. If we make any amendments to our Code of Business Conduct and Ethics, or grant any waiver from a provision of our Code of Business Conduct and Ethics to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Annual Report.
Delinquent Section 16(a) Reports
Information regarding compliance with Section 16(a) of the Exchange Act required by this item will be contained in our Proxy Statement under the caption “Delinquent Section 16(a) Reports,” if any, and is hereby incorporated by reference.
Insider Trading Policy
We adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our ordinary shares by directors, officers, employees and consultants that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable listing standards. It is our policy to comply with all applicable laws and regulations relating to insider trading in connection with the repurchase of our securities. A copy of our Amended and Restated Insider Trading Policy, as amended, is filed as Exhibit 19.1 to this report.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding our executive compensation required by this item will be contained in our Proxy Statement under the captions “Executive Compensation,” “Pay Versus Performance” and “Director Remuneration,” and is hereby incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information required by this item will be contained in our Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” and is hereby incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by this item will be contained in our Proxy Statement under the captions “Board of Directors and Corporate Governance—Corporate Governance—Board Independence” and “Transactions with Related Persons” and is hereby incorporated by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Information regarding accounting fees and services required by this item will be contained in our Proxy Statement in the Proposal titled “Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the Year Ending December 31, 2026” under the captions “Independent Registered Public Accounting Firm Fees” and “Pre-Approval Policies and Procedures” and is hereby incorporated by reference.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The financial statements schedules and exhibits filed as part of this Annual Report on Form 10-K are as follows:
(a)(1) Financial Statements
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 876) F-2
Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4
Notes to Consolidated Financial Statements F-8
(a)(2) Financial Statement Schedules
All other schedules are omitted because they are not required or the required information is included in the financial statements or notes thereto.
(a)(3) Exhibits
The exhibits listed below are filed as part of this Annual Report other than Exhibit 32.1, which shall be deemed furnished:
Number Description
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Number Description
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Number Description
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Number Description
19.1 Amended and Restated Insider Trading Policy, as amended October 1, 2025.
23.1 Consent of Independent Registered Public Accounting Firm.
24.1 Power of Attorney (included on the signature page of this report).
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Number Description
101.INS Inline XBRL Instance Document.
* Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
+ Indicates a management contract or compensatory plan.
ITEM 16. FORM 10-K SUMMARY
None.
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Index to Consolidated Financial Statements of
Bicycle Therapeutics plc
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 876) F-2
Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4
Notes to Consolidated Financial Statements F-8
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Report of Independent Registered Public Accounting Firm
TotheBoard of Directors and Shareholders of Bicycle Therapeutics plc
Opinion on the Financial Statements
We have audited the accompanying consolidatedbalance sheets of Bicycle Therapeutics plc and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidatedfinancial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Companyas of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidatedfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidatedfinancial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidatedfinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidatedfinancial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to theconsolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
External research and development expenses
As described in Note 2 and 5 to the consolidated financial statements, research and development expenses were $240.3 million for the year ended December 31, 2025, of which a significant portion related to external research and development expense. Accrued external research and development expenses were $20.5 million as of December 31, 2025. The Company has entered into various research and development and manufacturing contracts, including contracts with respect to preclinical studies and clinical trials. Research and development costs are expensed as incurred. Significant judgments and estimates are made by management in estimating external research and development expenses incurred and associated accrued balance at the end of the reporting period.
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For estimating accrued external research and development expenses, management analyzes the progress of the research and development and manufacturing activities, including the level of service performed and associated cost incurred, invoices received and contracted costs.
The principal considerations for our determination that performing procedures relating to external research and development expenses is a critical audit matter are (i) the significant judgment by management in developing the estimate of the accrued external research and development expenses; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumption related to the level of service performed.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) reading significant research and development and manufacturing contracts; (ii) testing the external research and development expenses incurred, on a sample basis, by tracing information to the underlying contracts, purchase orders, invoices and information received from the research institutions or vendors, as applicable; (iii) testing management’s process for estimating the accrued external research and development expenses; (iv) testing the completeness and accuracy of underlying data used by management; and (v) evaluating the reasonableness of the significant assumption used by management in estimating of the level of service performed on a sample of contracts. Evaluating management’s assumption related to the level of service performed involved obtaining and examining a sample of third party contracts to evaluate the completeness and consistency of the costs and milestones in the contract with those used in developing the estimate, testing the associated cost incurred based on underlying contracts and other information received from research organizations and re-calculating the level of service performed for a study or research and development activity.
Accounting for termination of Novartis Collaboration Agreement
As described in Note 9 to the consolidated financial statements, in November 2025, Novartis Pharma AG (“Novartis”) provided the Company with a notice of termination of the Novartis Collaboration Agreement in its entirety, effective in February 2026. Management exercised significant judgment in concluding that the notice of termination should be accounted for as a contract modification in the fourth quarter of 2025 as it reduces the scope of the arrangement. Management concluded that the notice of termination substantively removes all remaining performance obligations, including remaining material rights, as of the date of the notice as Novartis will not benefit from any remaining activities performed during the notice period and the likelihood of exercising any remaining options is remote. As a result, the Company recognized the remaining unrecognized transaction price of $41.9 million as revenue on the date of the notice of termination.
The principal considerations for our determination that performing procedures relating to accounting for the termination of Novartis Collaboration Agreement is a critical audit matter are (i) the significant judgment by management in determining the timing of accounting for the termination of collaboration agreement, and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures related to accounting for the termination of Novartis Collaboration Agreement.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) reading the Novartis Collaboration Agreement and the notice of termination; (ii) evaluating management’s assessment of the accounting for the termination of the Novartis Collaboration Agreement; (iii) evaluating the reasonableness of significant judgment used by management related to the determination that Novartis will not benefit from any remaining activities performed during the notice period and the likelihood of exercising any remaining options is remote by evaluating its consistency with the contractual terms and considering the progress of the research as of the date of termination; and (iv) evaluating the sufficiency of the disclosures in the consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
Cambridge, United Kingdom
March 17, 2026
We have served as the Company’s auditor since 2010.
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Bicycle Therapeutics plc
Consolidated Balance Sheets
(In thousands, except share and per share data)
December 31, December 31,
Assets
Current assets:
Prepaid expenses and other current assets 19,181 13,432
Research and development incentives receivable 35,594 35,653
Property and equipment, net 6,021 9,516
Operating lease right-of-use assets 15,886 7,673
Liabilities and shareholders’ equity
Current liabilities:
Accrued expenses and other current liabilities 44,354 41,246
Deferred revenue, current portion 2,961 10,191
Operating lease liabilities, net of current portion 14,096 3,990
Deferred revenue, net of current portion 35,508 91,467
Other long‐term liabilities 1,032 1,121
Commitments and contingencies (Note 11)
Shareholders’ equity:
Accumulated other comprehensive (loss) income (3,505) 119
Total liabilities and shareholders’ equity $ 717,597 $ 956,868
The accompanying notes are an integral part of the consolidated financial statements
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Bicycle Therapeutics plc
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
Year Ended
December 31,
Operating expenses:
Other income (expense):
Loss on extinguishment of debt — (954) —
Provision for (benefit from) income taxes 152 (4,765) 1,457
Net loss per share, basic and diluted $ (3.16) $ (2.90) $ (5.08)
Comprehensive loss:
Other comprehensive income (loss):
Foreign currency translation adjustment (3,624) 1,423 (1,691)
The accompanying notes are an integral part of the consolidated financial statements
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Bicycle Therapeutics plc
Consolidated Statements of Shareholders’ Equity
(In thousands, except share amounts)
Accumulated
Additional Other Total
Ordinary Shares Paid‐in Comprehensive Accumulated Shareholders’
Shares Amount Capital Income (Loss) Deficit Equity
Share-based compensation expense — — 32,477 — — 32,477
Share-based compensation expense — — 38,081 — — 38,081
Share-based compensation expense — — 39,464 — — 39,464
The accompanying notes are an integral part of the consolidated financial statements
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Bicycle Therapeutics plc
Consolidated Statements of Cash Flows
(In thousands)
Year Ended
December 31,
Cash flows from operating activities:
Non-cash interest — 211 383
Loss on extinguishment of debt — 954 —
Deferred income tax (benefit) provision (850) (5,226) 3,306
Other non-cash charges — 1,036 661
Changes in operating assets and liabilities:
Accounts receivable — — 2,482
Research and development incentives receivable 2,892 (11,947) (3,684)
Prepaid expenses and other assets (5,816) (2,044) (2,072)
Accrued expenses and other current liabilities 4,093 9,698 2,398
Other long-term liabilities — 189 509
Cash used in investing activities:
Purchases of property and equipment (2,350) (1,235) (2,929)
Net cash used in investing activities (2,350) (1,235) (2,929)
Cash flows from financing activities:
Repayment of debt — (31,863) —
Principal payments on finance lease obligations (168) (42) —
Net cash (used in) provided by financing activities (131) 519,750 250,027
Reconciliation of cash, cash equivalents and restricted cash
Restricted cash included in other assets 58 547 547
Supplemental disclosure of cash flow information
Cash paid for interest on debt $ — $ 1,373 $ 2,753
Cash paid for interest on finance lease obligations $ 78 $ 23 $ —
Cash (received from) paid for income taxes $ (717) $ 792 $ 562
Property and equipment obtained under finance leases $ — $ 1,102 $ —
The accompanying notes are an integral part of the consolidated financial statements
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Bicycle Therapeutics plc
Notes to Consolidated Financial Statements
1. Nature of the business and basis of presentation
Bicycle Therapeutics plc (collectively with its subsidiaries, the “Company”) is a clinical-stage pharmaceutical company developing a novel class of medicines, which the Company refers to as Bicycle® molecules, for diseases that are underserved by existing therapeutics. Bicycle molecules are a unique therapeutic modality combining the pharmacology usually associated with a biologic with the manufacturing and pharmacokinetic properties of a small molecule. The Company’s internal programs are focused on oncology indications with high unmet medical need.
The accompanying consolidated financial statements include the accounts of Bicycle Therapeutics plc and its wholly owned subsidiaries, BicycleTx Limited, BicycleRD Limited and Bicycle Therapeutics Inc. All intercompany balances and transactions have been eliminated on consolidation.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Liquidity
As of December 31, 2025, the Company had cash and cash equivalents of $628.1 million.
The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff and raising capital. The Company has funded its operations with proceeds from the sale of its equity securities, as well as proceeds received from its collaboration arrangements (Note 9) and proceeds from a loan agreement with Hercules Capital, Inc. (“Hercules”) (Note 6). The Company has incurred recurring losses since inception, including net losses of $219.0 million, $169.0 million, and $180.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, the Company had an accumulated deficit of $899.8 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least twelve months from the issuance date of these annual consolidated financial statements.
On May 23, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with purchasers named therein (the “Investors”). Pursuant to the Purchase Agreement, the Company sold 6,764,705 ADSs, representing the same number of ordinary shares, nominal value £0.01 per share, and 19,169,001 non-voting ordinary shares, nominal value £0.01 per share, each at a purchase price equal to $21.42 per share (the “Private Placement”). The Company completed the Private Placement on May 28, 2024. The transaction resulted in gross proceeds to the Company of $555.5 million, and after deducting commissions and offering expenses of $11.4 million, net proceeds to the Company of $544.1 million.
On July 17, 2023, the Company completed an underwritten public offering of its securities, pursuant to which the Company issued and sold 6,117,648 ADSs, representing the same number of ordinary shares, nominal value £0.01 per share, which included 1,411,764 ADSs sold upon the underwriters’ full exercise of their option to purchase additional ADSs, and 4,705,882 non-voting ordinary shares, nominal value £0.01 per share, at a public offering price of $21.25 per ADS or non-voting ordinary share, respectively. The transaction resulted in gross proceeds to the Company of $230.0 million, and after deducting underwriting discounts, commissions, and offering expenses of $14.9 million, net proceeds to the Company of $215.1 million.
On June 5, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. (the “Sales Agents”) with respect to an at-the-market (“ATM”) program pursuant to which the Company may offer and sell through the Sales Agents, from time to time at the Company’s sole discretion,
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ADSs, each ADS representing one ordinary share. No ADSs were issued or sold pursuant to the Sales Agreement during the years ended December 31, 2025 and 2024. During the year ended December 31, 2023, the Company issued and sold 1,561,176 ADSs, representing the same number of ordinary shares for gross proceeds of $35.3 million, resulting in net proceeds of $34.2 million after deducting sales commissions and offering expenses of $1.1 million.
The Company expects its expenses to increase substantially in connection with ongoing activities, particularly if, and as, the Company advances its clinical trials for its product candidates in development and preclinical activities. Accordingly, the Company will need to obtain additional funding in connection with continuing operations. If the Company is unable to raise funding when needed, or on attractive terms, it could be forced to delay, reduce or eliminate its research or drug development programs or any future commercialization efforts. There is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.
The Company is subject to risks common to companies in the biotechnology and pharmaceutical industries, including but not limited to, risks of delays in initiating or continuing research programs and clinical trials, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, if approved, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if the Company’s research and development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
2. Summary of significant accounting policies
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition, the accrual for research and development expenses and research and development incentives receivable, share-based compensation expense, valuation of right-of-use assets and liabilities, gain on extinguishment of research and development funding liability and income taxes, including the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of reasonable changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions.
Significant risks and uncertainties
The Company currently operates in a period of economic uncertainty which has been significantly impacted by domestic and global monetary and fiscal policy, changes to global trade policies, geopolitical conflicts and war, inflation and interest rates, and fluctuations in monetary exchange rates. While the Company has experienced limited financial impacts at this time, the Company continues to monitor these factors and events and the potential effects each may have on the Company’s business, financial condition, results of operations and growth prospects.
Foreign currency and currency translation
The reporting currency of the Company is the U.S. Dollar (“USD”). The functional currency of Bicycle Therapeutics plc is the USD. The functional currency of Bicycle Therapeutics plc’s wholly owned non-U.S. subsidiaries, BicycleTx Limited and BicycleRD Limited, is the British Pound Sterling, and the functional currency of its U.S. subsidiary, Bicycle Therapeutics Inc., is the USD. The functional currency of the Company’s subsidiaries is the same as
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the local currency. Monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in general and administrative expense in the consolidated statements of operations and comprehensive loss as incurred. The Company recorded a foreign exchange gain of $0.7 million for the year ended December 31, 2025, and foreign exchange losses of $0.7 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively.
The Company translates the assets and liabilities of its non-U.S. subsidiaries into USD at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a foreign currency translation adjustment, which is included in the consolidated statements of shareholders’ equity as a component of accumulated other comprehensive (loss) income.
Concentrations of credit risk and of significant suppliers
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company deposits its cash in financial institutions in amounts that may exceed federally insured limits and has not experienced any losses on such accounts. The Company diversifies its cash and cash equivalents in multiple financial institutions and in money market funds and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships and investments in money market funds.
As of December 31, 2025 and 2024, the Company had no accounts receivable. For the years ended December 31, 2025, 2024, and 2023, the Company’s revenue has been generated from collaboration agreements with Bayer Consumer Care AG (“Bayer”), Novartis Pharma AG (“Novartis”), Ionis Pharmaceuticals, Inc. (“Ionis”), Genentech, Inc. (“Genentech”) and AstraZeneca AB (“AstraZeneca”) (Note 9).
The Company relies, and expects to continue to rely, on multiple vendors to manufacture clinical trial materials and raw materials for its development programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.
Cash, cash equivalents and restricted cash
The Company considers all highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less at date of purchase to be cash equivalents. The Company had cash equivalents of $364.2 million and $664.9 million at December 31, 2025 and 2024, respectively.
As of December 31, 2025 and 2024, the Company had $0.5 million of restricted cash related to a collateralized letter of credit in connection with the Company’s lease for office and laboratory space in Cambridge, Massachusetts, which is included within prepaid expenses and other current assets, and other assets, respectively, in the Company’s consolidated balance sheet.
Deferred offering costs
The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in shareholders’ equity as a reduction of proceeds generated as a result of the offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations and comprehensive loss.
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Property and equipment
Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful lives of the respective assets as follows:
Estimated Useful Life
Laboratory equipment 3 to 5 years
Leasehold improvements Lesser of lease term or useful life
Computer equipment and software 3 years